SME, Critical Success Factors, South Africa


SMEs comprise over 90% of African business operations and contribute to over 50% of African employment and Growth Domestic Product (GDP). SMEs sector has shown positive signs in South Africa, Mauritius and North Africa. In South Africa, SMEs constitute 55% of all jobs. Research of Bowler, Dawood and Page (2007) reveal that 40% of new business ventures fail in their first year, 60% in their second year, and 90% in their first 10 years of existence. It seems that a number of challenges have been identified as contributing to the failure of SMEs in South Africa and worldwide. The purpose of this paper is to identify some of the critical success factors for the SMEs to improve their performance in order to overcome the challenges they are faced within the competitive market environment. The research problem of this study emanates from the current high business failure rate. The research investigates what are the critical success factors that can help these SMEs to be sustainable and have positive growth so to limit the high business failure rate in South Africa. The research established that attracting repeat customers and the performance of the product are the critical success factors that can lead to the sustenance of these SMEs. The study concluded that the resource-constraint SMEs need to focus on critical success factors to build competitive advantage to stay competitive amidst the challenges from globalisation and liberalisation. This study will make further contribution on understanding these critical success factors as they are central to business success, especially in South Africa where it is estimated that the failure rate of small, medium and micro enterprises (SMEs) is between 70% and 80% (Brink and Cant, 2009).